The scheme initiated on Wednesday will collect forests’ carbon sequestration data to activate trade.
A measurement and monitoring centre has been set up in the capital city of Yunnan Province, which along with six other provinces including Shanxi and Zhejiang to undertake scientific researches in hope to bolster a domestic voluntary market for the Chinese afforestation projects.
“Dubbed the Kingdom of Plants, Yunnan is characterised with biodiversities with various forest types, of which we can supervise CO2 sequestration rate and choose the best qualified species to build a large carbon sink nation widely” local officials said in the launching ceremony in Kunming.
The scheme will frame a data registry system and examine factors impacting on forest carbon storage followed by international equivalent standards issued by the State Forestry Administration (SFA).
“We referred to standards developed by organizations such as CCB, Winrock, IPCC to provide reliable measurement, reporting and verification (MRV) for China’s forest projects” Li Nuyun, vice director of Department of Afforestation under SFA told Point Carbon.
The top forest governing body in July has push forwarded two interim provisions to outline permissible techniques and inspection modes to accurately count measurable and verifiable forest carbon storage for China’ forest projects.
Li said that it is hard to precisely estimate the cost and CO2 emission cut from this scheme at the initiative stage because the situations vary determined by factors like geographic location, natural disturbance patterns, ect.
But she reckons that project assessment could be done within a year, with simpelised processes shortening the phase of validation for registration which based on Chinese record is two years for a Clean Development Mechanism(CDM) afforestation project in Guangxi province.
The crediting period is set to 20 years. But the scheme eyes domestic voluntary trade thus setting aside Clean Development Machanism (CDM) under which China has three afforestation projects registered.
“ We will prioritise planting non-commercial forest which outperforms in maintaining biodiversity and stability of forest ecosystem. The forest contribution to sustainability will outweigh the amount of carbon credits that we will get,” said Li.
The Chinese President Hu Jintao has committed last year to increase the country’s forested areas by 40 million hectares and forest stock volume by 13 billion cubic meters by 2020.
To achieve this goal, SFA in August launched the China Green Carbon fund calling for enterprises to donate for afforestation. Each donor will get certified carbon credits registered in a carbon account published on the administration’s website.
“More than a hundred of local companies have donated to the fund. The biggest contribution is $45 million from PetroChina, which can contribute 5-10 million tonnes of CO2 emission reduction in a decade time,” said Li.
The administration is drafting regulations for credit certification. It will push forward a revised accounting and monitoring guideline for carbon sequestration projects in a few weeks.
“ It is possible to trade these certified carbon credits in China’s voluntary market, but as the whole trading structure has to fit into the overall plan composed by the National Development and Reform Commission (NDRC), nothing has been settled yet,” said Li.
The Chinese top economic planner scheduled to announce regulations imposed on China’s voluntary carbon trade market by the end of this year. It also plans to initiate a pilot ETS to financing the country’s mitigation activities within next five years, yet details have not been given.
China’s Pearl River Basin in Guangxi reforestation project is the world's first Clean Development Mechanism(CDM) forestry carbon sequestration projects.
The project was registered in 2006 to plant 4,000 hector of forest generating 0.6 million tonnes of certified emission credits (CERs) within 15 years. The BioFund of the World Bank bought the credits for $4 per tonne.
The second phase of the Guanxi project was told at $ 5 per tonne to the same buyer. And another project in Sichuan only sold out 20 thousand tonnes at $ 6.5 per tonne after it has been registered. The price is much lower than the 8 euro floor price for Chinese CDM projects.
“The CDM forest projects have too complex accounting and procedures that many professionals called the executive board for a more effective working process,” said Li.
The administrate doesn’t recommend unilateral project development, according to Li the pre-development cost would over RMB 10 thousand ($1.5 million).
“ We hope to trade in the domestic voluntary market with international equivalent standards adopted to Chinese condition after the whole system being build. We also like to see foreign buyers as the scheme will be build capable to link with the international market,” said Li.